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false0001590717 0001590717 2019-08-06 2019-08-06


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 
 
 
 
 
FORM 8-K
 
 
 
 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2019
 
 
 
 
 
CareTrust REIT, Inc.
(Exact name of registrant as specified in its charter)  
 
 
 
 
 
Maryland
001-36181
46-3999490
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
Registrant’s telephone number, including area code: (949542-3130
 
 
 
 
 
 
 
 
905 Calle Amanecer
,
Suite 300
,
San Clemente
,
CA
 
92673
(Address of principal executive offices)
 
(Zip Code)
Not Applicable
(Former name or former address, if changed since last report.)
 
 
 
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
CTRE
The Nasdaq Stock Market LLC
 
 
(Nasdaq Global Select Market)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
 
 
 
 
 






Item 2.02
Results of Operations and Financial Condition.

On August 6, 2019, CareTrust REIT, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2019. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 7.01
Regulation FD Disclosure

A copy of the Company’s supplemental financial information for the second quarter ended June 30, 2019 is attached hereto as Exhibit 99.2 and is incorporated herein by reference. A copy of the supplemental financial information is also available on the “Investors” section of the Company’s website at www.caretrustreit.com.

Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01. Financial Statements and Exhibits.

 
(d)
Exhibits.
 
 
 
 
Exhibits
  
Description
 
 
  
 
 
 
 
 
 
*101.INS
 
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XBRL Taxonomy Extension Schema Document
 
 
*101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
*101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
 
 
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XBRL Taxonomy Extension Label Linkbase Document
 
 
*101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
Date: August 6, 2019
 
CARETRUST REIT, INC.
 
 
 
 
 
 
By:
/s/ William M. Wagner
 
 
 
 
William M. Wagner
 
 
 
Chief Financial Officer, Treasurer and Secretary



Exhibit
Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13045204&doc=33

CareTrust REIT Announces Second Quarter 2019 Operating Results

Conference Call Scheduled for Wednesday, August 7, 2019 at 1:00 pm ET
SAN CLEMENTE, Calif., August 6, 2019 (GLOBE NEWSWIRE) -- CareTrust REIT, Inc. (Nasdaq:CTRE) today reported operating results for the quarter ended June 30, 2019, as well as other recent events.
For the quarter, CareTrust REIT reported:
Net income of $19.7 million, a quarter-over-quarter increase of 48%, and net income per diluted weighted-average common share of $0.21;
Normalized FFO of $33.1 million, a quarter-over-quarter increase of 35%, and normalized FFO per diluted weighted-average common share of $0.35;
Normalized FAD of $34.3 million, a quarter-over-quarter increase of 34%, and normalized FAD per diluted weighted-average common share of $0.36;
A net debt-to-normalized EBITDA ratio of 3.3x, and a net debt-to-enterprise value of 19%, each as of quarter-end; and
Approximately $241 million in new investments in the quarter.

Growth and Repositioning
Greg Stapley, CareTrust's Chairman and Chief Executive Officer, said, “We are pleased to be posting our best-ever quarter for acquisitions, and we are especially pleased with the outstanding operators that we have been able to grow with.” He reported that the newly-acquired assets had not only allowed the Company to grow with existing tenants Priority Management Group and Cascadia Healthcare, but that two new tenants had joined the CareTrust fold, Texas-based Southwest LTC and Next Gen P LLC. “These are experienced and outstanding regional operators, and we look forward to growing further with all of them,” he added.
Mr. Stapley also noted that the Company’s record acquisition pace in the first half of the year, along with its conservative leverage levels, had allowed the Company to critically reexamine its portfolio for key re-tenanting and capital recycling opportunities. “Every portfolio can be improved and strengthened, and our solid growth this year has given us a chance to focus on opportunities within both our asset base and our tenant pool to do exactly that,” he said. As a result of those reviews, the Company disclosed upcoming changes in a portion of its Ohio portfolio. “Even though our increased focus on certain asset management matters has commanded a greater degree of the team’s attentions, we have continued to actively work on our investment pipeline and we currently expect to close on additional acquisitions before year end,” he said.
Financial Results for Quarter Ended June 30, 2019
Chief Financial Officer Bill Wagner reported that, for the second quarter, CareTrust generated net income of $19.7 million, or $0.21 per diluted weighted-average common share, normalized FFO of $33.1 million, or $0.35 per diluted weighted-average common share, and normalized FAD of $34.3 million, or $0.36 per diluted weighted-average common share. “We are pleased to be delivering a quarter-over-quarter increase in both normalized FFO and normalized FAD while simultaneously issuing equity to significantly reduce our leverage and prepare for the future,” said Mr. Wagner.
Liquidity
Discussing the Company’s balance sheet, Mr. Wagner reported that, as of quarter end, CareTrust’s net debt-to-normalized EBITDA ratio was approximately 3.3x and its net debt-to-enterprise value was approximately 19%. “Our current debt levels continue to be well under management’s stated target leverage range of 4.0x to 5.0x net debt-to-normalized EBITDA, allowing us substantial optionality with respect to how we choose to fund significant growth going forward,” he said.
Mr. Wagner also reported that during the quarter, CareTrust issued an additional 6.6 million shares of common stock for net proceeds of approximately $149.0 million in an overnight offering that was approximately four times oversubscribed. He further noted that there had been no activity in the quarter on the Company's at-the-market equity program but, he added, “Our ATM program remains a significant asset in the Company’s toolbox, with $300 million remaining in authorization at present."



Subsequent Events
On July 15, 2019, the Company terminated its existing master lease with affiliates of Trillium Healthcare Group, LLC. The terminated master lease covered ten properties in Iowa, seven properties in Ohio and one property in Georgia. “In recent weeks, we and Trillium have come to the conclusion that a change is best for them and for the Ohio facilities,” said Dave Sedgwick, CareTrust’s Chief Operating Officer. Mr. Sedgwick reported that the Company and Trillium have entered into negotiations for a new master lease covering only the properties in Iowa and Georgia, and that Trillium will continue operating the seven properties in Ohio under the post-termination terms and conditions of the terminated master lease until those operations are transferred to new operators.
The Company also reported plans to sell three of the Ohio properties, subject to normal diligence and state approval processes, with a target closing date of September 1, 2019. The Company also reported that it is engaged in substantive negotiations to lease the remaining four Ohio assets to a new operator, also with a target transfer date of September 1, 2019.
“The planned Ohio transactions allow us to dispose of a couple of challenging facilities and install an operator in the remaining assets with more experience and resources in the region, while allowing Trillium to refocus their efforts in Iowa and Georgia,” said Mr Sedgwick. Mr. Wagner added that as a result of the lease termination, the Company expects to write-off accounts and straight-line rent receivable by approximately $2.4 million in the third quarter. He also noted that following the successful execution of the contemplated transactions, the new Trillium lease would represent approximately 2.2% of CareTrust’s cash rental revenue.
2019 Guidance Update
The Company updated its guidance for 2019, with Mr. Wagner projecting on a per-diluted weighted-average common share basis net income of approximately $0.69 to $0.71, normalized FFO of approximately $1.35 to $1.37, and normalized FAD of approximately $1.40 to $1.42. He noted that the 2019 guidance is based on a diluted weighted-average common share count of 93.4 million shares and assumes no new acquisitions or dispositions beyond those completed to date, no new debt incurrences or new equity issuances, and estimated 1.5% CPI-based rent escalators under CareTrust's long-term net leases.
Dividend Declared
During the quarter, CareTrust declared a quarterly dividend of $0.225 per common share. “On an annualized basis, our quarterly dividend represents a payout ratio of approximately 64% based on the second quarter 2019 normalized FFO, and 63% on normalized FAD,” said Mr. Wagner. “At this level, our dividend remains among the best-protected of all our industry peers, while simultaneously providing additional growth capital for reinvestment and a solid overall return to our shareholders,” he added.
Portfolio Growth in the Quarter
During the second quarter, CareTrust acquired seven skilled nursing facilities and one multi-service campus in Louisiana, which were re-tenanted at closing with CareTrust's existing tenant Priority Management Group, LLC. The transaction also included three skilled nursing facilities and one continuing care retirement community in Texas, which were re-tenanted with Texas-based Southwest LTC, Ltd. under a new master lease with CareTrust. The aggregate purchase price for the 12-property portfolio was approximately $215.0 million, inclusive of capital expenditure commitments and estimated transaction costs, and initial annual cash rents from the investment are approximately $19.0 million. The portfolio acquisition was initially funded using approximately $185.0 million in borrowings under CareTrust’s $600 million revolving credit facility, with the remainder funded with cash on hand, and the revolving borrowings largely paid down shortly thereafter with the net proceeds of CareTrust’s $149.0 million overnight equity offering completed in early April.
CareTrust also acquired a 118-operating bed skilled nursing facility in Dallas, Texas, and leased it to Next Gen P, LLC. The total investment was approximately $10.0 million, inclusive of transaction costs, and the new master lease carries an annual cash rent of approximately $900,000. CareTrust funded the acquisition using cash on hand.
CareTrust also acquired Cascadia of Nampa, a newly constructed 99-bed transitional rehabilitation facility located one block from the 152-bed Saint Alphonsus Medical Center in Nampa, Idaho. The facility was added to CareTrust’s existing master lease with Idaho-based Cascadia Healthcare, LLC, bringing the total facility count under the Cascadia master lease to 12 facilities with 1,013 licensed beds. CareTrust participated in the new facility’s development, making a preferred equity investment with Cascadia’s development affiliate in 2016 to construct the facility. In conjunction with the investment, CareTrust obtained an option to purchase the facility at a formula-based price upon stabilization of the operations. Cascadia completed construction and opened the facility in November of 2017. CareTrust’s investment for Cascadia of Nampa was approximately $16.2 million, inclusive of transaction costs, and initial annual cash rent was approximately $1.45 million. The Cascadia master lease carries annual CPI-based escalators and has approximately 12 years remaining on the initial term, plus three five-year renewal options. The acquisition was funded using cash on hand and a credit for CareTrust’s original equity investment in the facility and preferred returns thereon.
CareTrust also announced that it intends to acquire the Nampa facility’s sister facility, Cascadia of Boise, by year-end. Mark Lamb, CareTrust’s Chief Investment Officer, said, “We anticipate that our preferred equity investment in Cascadia of Boise, a second brand new state of the art 99-bed skilled nursing facility located in Boise, Idaho that is now nearing stabilization, will close by year end, at an expected price similar to the price we paid for its twin in nearby Nampa.”



Conference Call

A conference call will be held on Wednesday, August 7, 2019, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time), during which CareTrust’s management will discuss second quarter 2019 results, recent developments and other matters. The dial-in number for this call is (855) 232-8954 (U.S.) or (408) 337-0151 (International). The conference ID number is 1796826. To listen to the call online, or to view any financial or other statistical information required by SEC Regulation G, please visit the Investors section of the CareTrust REIT website at http://investor.caretrustreit.com. The call will be recorded, and will be available for replay via the website for 30 days following the call.

About CareTrustTM 

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition and leasing of seniors housing and healthcare-related properties. With 213 net-leased healthcare properties and three operated seniors housing properties in 28 states, CareTrust is pursuing opportunities across the nation to acquire properties that will be leased to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare-related businesses. More information about CareTrust is available at www.caretrustreit.com.



Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains, and the related conference call will include, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding future financial and financing positions, business and acquisition strategies, growth prospects, operating and financial performance, expectations regarding the making of distributions, payment of dividends, compliance with and changes in governmental regulations, and the performance of the Company’s tenants and operators and their respective facilities.
Words such as “anticipate,” “believe,” “could,” “expect,” “estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,” “would,” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. The Company’s forward-looking statements are based on management’s current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although the Company believes that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and the Company can give no assurance that its expectations will be attained. Factors which could have a material adverse effect on the Company’s operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) the ability and willingness of Company tenants to meet and/or perform their obligations under the triple-net leases the Company has entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold the Company harmless from and against various claims, litigation and liabilities; (ii) the ability and willingness of the Company’s tenants to comply with laws, rules and regulations in the operation of the properties the Company leases to them; (iii) the ability and willingness of the Company’s tenants to renew their leases with the Company upon expiration and the ability to reposition Company properties on the same or better terms in the event of nonrenewal or in the event the Company replaces an existing tenant, as well as any obligations, including indemnification obligations, that the Company may incur in connection with the replacement of an existing tenant; (iv) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities and the ability to acquire and lease the respective properties to such tenants on favorable terms; (v) the ability to generate sufficient cash flows to service the Company’s outstanding indebtedness; (vi) access to debt and equity capital markets; (vii) fluctuating interest rates; (viii) the ability to retain key management personnel; (ix) the ability to maintain the Company’s status as a real estate investment trust (“REIT”); (x) changes in the U.S. tax laws and other state, federal or local laws, whether or not specific to REITs; (xi) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xii) any additional factors identified in the Company’s filings with the Securities and Exchange Commission (“SEC”), including those in the Company‘s Annual Report on Form 10-K for the year ended December 31, 2018 under the heading entitled “Risk Factors,” as such risk factors may be amended, supplemented or superseded from time to time by other reports the Company files with the SEC.
Information in this press release or the related conference call is provided as of June 30, 2019, unless specifically stated otherwise. The Company expressly disclaims any obligation to update or revise any information in this press release or the related conference call (and replays thereof), including forward-looking statements, whether to reflect any change in the Company’s expectations, any change in events, conditions or circumstances, or otherwise.
As used in this press release or the related conference call, unless the context requires otherwise, references to “CTRE,” "CareTrust," “CareTrust REIT” or the “Company” refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America.
Contact:
CareTrust REIT, Inc.
(949) 542-3130
ir@caretrustreit.com






CARETRUST REIT, INC.
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
 (Unaudited)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
 
Rental income
$
44,123

 
$
34,708

 
$
82,470

 
$
68,524

 
Tenant reimbursements

 
3,016

 

 
5,984

 
Independent living facilities
887

 
845

 
1,747

 
1,644

 
Interest and other income
1,191

 
400

 
1,642

 
918

 
Total revenues
46,201

 
38,969

 
85,859

 
77,070

Expenses:
 
 
 
 
 
 
 
 
Depreciation and amortization
13,437

 
11,299

 
25,339

 
22,876

 
Interest expense
7,285

 
7,285

 
14,145

 
14,377

 
Property taxes
456

 
3,016

 
1,282

 
5,984

 
Independent living facilities
719

 
744

 
1,426

 
1,460

 
General and administrative
4,606

 
3,358

 
7,916

 
6,550

 
Total expenses
26,503

 
25,702

 
50,108

 
51,247

Other income:
 
 
 
 
 
 
 
 
Gain on sale of real estate

 

 

 
2,051

Net income
$
19,698

 
$
13,267

 
$
35,751

 
$
27,874

 
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
Basic
$
0.21

 
$
0.17

 
$
0.39

 
$
0.36

 
Diluted
$
0.21

 
$
0.17

 
$
0.39

 
$
0.36

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
Basic
94,036

 
76,374

 
91,039

 
75,941

 
Diluted
94,036

 
76,374

 
91,039

 
75,941

 
 
 
 
 
 
 
 
 
Dividends declared per common share
$
0.225

 
$
0.205

 
$
0.45

 
$
0.41







CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES
(in thousands)
 (Unaudited)
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
Net income
 
$
19,698

 
$
13,267

 
$
35,751

 
$
27,874

 
Depreciation and amortization
 
13,437

 
11,299

 
25,339

 
22,876

 
Interest expense
 
7,285

 
7,285

 
14,145

 
14,377

 
Amortization of stock-based compensation
 
1,147

 
924

 
2,141

 
1,828

EBITDA
 
41,567

 
32,775

 
77,376

 
66,955

 
Gain on sale of real estate
 

 

 

 
(2,051
)
Normalized EBITDA
 
$
41,567

 
$
32,775

 
$
77,376

 
$
64,904

 
 
 
 
 
 
 
 
 
 
Net income
 
$
19,698

 
$
13,267

 
$
35,751

 
$
27,874

 
Real estate related depreciation and amortization
 
13,421

 
11,265

 
25,305

 
22,814

 
Gain on sale of real estate
 

 

 

 
(2,051
)
Funds from Operations (FFO)
 
33,119

 
24,532

 
61,056

 
48,637

Normalized FFO
 
$
33,119

 
$
24,532

 
$
61,056

 
$
48,637







CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES (continued)
 (in thousands, except per share data)
 (Unaudited)
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
Net income
 
$
19,698

 
$
13,267

 
$
35,751

 
$
27,874

 
Real estate related depreciation and amortization
 
13,421

 
11,265

 
25,305

 
22,814

 
Amortization of deferred financing fees
 
487

 
484

 
1,028

 
968

 
Amortization of stock-based compensation
 
1,147

 
924

 
2,141

 
1,828

 
Straight-line rental income
 
(474
)
 
(342
)
 
(937
)
 
(933
)
 
Gain on sale of real estate
 

 

 

 
(2,051
)
Funds Available for Distribution (FAD)
 
34,279

 
25,598

 
63,288

 
50,500

Normalized FAD
 
$
34,279

 
$
25,598

 
$
63,288

 
$
50,500

 
 
 
 
 
 
 
 
 
 
FFO per share
 
$
0.35

 
$
0.32

 
$
0.67

 
$
0.64

Normalized FFO per share
 
$
0.35

 
$
0.32

 
$
0.67

 
$
0.64

 
 
 
 
 
 
 
 
 
 
FAD per share
 
$
0.36

 
$
0.33

 
$
0.69

 
$
0.66

Normalized FAD per share
 
$
0.36

 
$
0.33

 
$
0.69

 
$
0.66

 
 
 
 
 
 
 
 
 
 
 
Diluted weighted average shares outstanding [1]
 
94,292

 
76,545

 
91,295

 
76,103

 
 
 
 
 
 
 
 
 
 
 
 [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method.








CARETRUST REIT, INC.
CONSOLIDATED INCOME STATEMENTS - 5 QUARTER TREND
(in thousands, except per share data)
 (Unaudited)
 
Quarter
Quarter
Quarter
Quarter
Quarter
 
Ended
Ended
Ended
Ended
Ended
 
June 30, 2018
September 30, 2018
December 31, 2018
March 31, 2019
June 30, 2019
Revenues:
 
 
 
 
 
Rental income
$
34,708

$
35,332

$
36,217

$
38,347

$
44,123

Tenant reimbursements
3,016

2,990

2,950



Independent living facilities
845

871

864

860

887

Interest and other income
400

317

330

451

1,191

Total revenues
38,969

39,510

40,361

39,658

46,201

Expenses:
 
 
 
 
 
Depreciation and amortization
11,299

11,351

11,539

11,902

13,437

Interest expense
7,285

6,805

6,678

6,860

7,285

Property taxes
3,016

2,990

2,950

826

456

Independent living facilities
744

766

738

707

719

General and administrative
3,358

3,088

2,917

3,310

4,606

Total expenses
25,702

25,000

24,822

23,605

26,503

Net income
$
13,267

$
14,510

$
15,539

$
16,053

$
19,698

 
 
 
 
 
 
Diluted earnings per share
$
0.17

$
0.18

$
0.18

$
0.18

$
0.21

 
 
 
 
 
 
Diluted weighted average shares outstanding
76,374

81,490

84,084

88,010

94,036






CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND
(in thousands, except per share data)
 (Unaudited)
 
Quarter
Quarter
Quarter
Quarter
Quarter
 
Ended
Ended
Ended
Ended
Ended
 
June 30, 2018
September 30, 2018
December 31, 2018
March 31, 2019
June 30, 2019
 
 
 
 
 
 
Net income
$
13,267

$
14,510

$
15,539

$
16,053

$
19,698

Depreciation and amortization
11,299

11,351

11,539

11,902

13,437

Interest expense
7,285

6,805

6,678

6,860

7,285

Amortization of stock-based compensation
924

988

1,032

994

1,147

EBITDA
32,775

33,654

34,788

35,809

41,567

Normalized EBITDA
$
32,775

$
33,654

$
34,788

$
35,809

$
41,567

 
 
 
 
 
 
Net income
$
13,267

$
14,510

$
15,539

$
16,053

$
19,698

Real estate related depreciation and amortization
11,265

11,330

11,520

11,884

13,421

Funds from Operations (FFO)
24,532

25,840

27,059

27,937

33,119

Normalized FFO
$
24,532

$
25,840

$
27,059

$
27,937

$
33,119






CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND (continued)
 (in thousands, except per share data)
 (Unaudited)
 
Quarter
Quarter
Quarter
Quarter
Quarter
 
Ended
Ended
Ended
Ended
Ended
 
June 30, 2018
September 30, 2018
December 31, 2018
March 31, 2019
June 30, 2019
 
 
 
 
 
 
Net income
$
13,267

$
14,510

$
15,539

$
16,053

$
19,698

Real estate related depreciation and amortization
11,265

11,330

11,520

11,884

13,421

Amortization of deferred financing fees
484

484

486

541

487

Amortization of stock-based compensation
924

988

1,032

994

1,147

Straight-line rental income
(342
)
(698
)
(702
)
(463
)
(474
)
Funds Available for Distribution (FAD)
25,598

26,614

27,875

29,009

34,279

Normalized FAD
$
25,598

$
26,614

$
27,875

$
29,009

$
34,279

 
 
 
 
 
 
FFO per share
$
0.32

$
0.32

$
0.32

$
0.32

$
0.35

Normalized FFO per share
$
0.32

$
0.32

$
0.32

$
0.32

$
0.35

 
 
 
 
 
 
FAD per share
$
0.33

$
0.33

$
0.33

$
0.33

$
0.36

Normalized FAD per share
$
0.33

$
0.33

$
0.33

$
0.33

$
0.36

 
 
 
 
 
 
Diluted weighted average shares outstanding [1]
76,545

81,687

84,324

88,266

94,292

 
 
 
 
 
 
 [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method.










CARETRUST REIT, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
 
 
 
 
June 30, 2019
 
December 31, 2018
Assets:
 
 
 
 
Real estate investments, net
$
1,482,040

 
$
1,216,237

Other real estate investments, net
26,725

 
18,045

Cash and cash equivalents
2,629

 
36,792

Accounts and other receivables, net
9,705

 
11,387

Prepaid expenses and other assets
6,947

 
8,668

Deferred financing costs, net
3,513

 
633

 
 
 
Total assets
$
1,531,559

 
$
1,291,762

 
 
 
 
 
 
 
Liabilities and Equity:
 
 
 
Senior unsecured notes payable, net
$
295,532

 
$
295,153

Senior unsecured term loan, net
198,608

 
99,612

Unsecured revolving credit facility
45,000

 
95,000

Accounts payable and accrued liabilities
12,665

 
15,967

Dividends payable
21,617

 
17,783

 
 
 
Total liabilities
573,422

 
523,515

 
 
 
 
 
 
 
Equity:
 
 
 
 
Common stock
951

 
859

Additional paid-in capital
1,161,144

 
965,578

Cumulative distributions in excess of earnings
(203,958
)
 
(198,190
)
 
 
 
Total equity
958,137

 
768,247

 
 
 
Total liabilities and equity
$
1,531,559

 
$
1,291,762








CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
For the Six Months Ended June 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income
$
35,751

 
$
27,874

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization (including below-market ground leases)
25,354

 
22,885

Amortization of deferred financing costs
1,028

 
969

Amortization of stock-based compensation
2,141

 
1,828

Straight-line rental income
(937
)
 
(933
)
Noncash interest income
(21
)
 
(217
)
Gain on sale of real estate

 
(2,051
)
Interest income distribution from other real estate investment
463

 

Change in operating assets and liabilities:
 
 
 
Accounts and other receivables, net
(2,091
)
 
(2,837
)
Prepaid expenses and other assets
(185
)
 
(462
)
Accounts payable and accrued liabilities
235

 
(4,940
)
Net cash provided by operating activities
61,738

 
42,116

Cash flows from investing activities:
 
 
 
Acquisitions of real estate, net of deposits applied
(285,946
)
 
(47,310
)
Improvements to real estate
(68
)
 
(506
)
Purchases of equipment, furniture and fixtures
(2,613
)
 
(702
)
Investment in real estate mortgage and other loans receivable
(11,389
)
 
(1,390
)
Principal payments received on real estate mortgage and other loans receivable
482

 
58

Repayment of other real estate investment
2,204

 

Escrow deposits for acquisitions of real estate

 
(2,250
)
Net proceeds from the sale of real estate
131

 
13,004

Net cash used in investing activities
(297,199
)
 
(39,096
)
Cash flows from financing activities:
 
 
 
Proceeds from the issuance of common stock, net
196,041

 
47,547

Proceeds from the issuance of senior unsecured term loan
200,000

 

Borrowings under unsecured revolving credit facility
195,000

 
60,000

Payments on unsecured revolving credit facility
(245,000
)
 
(75,000
)
Payments on senior unsecured term loan
(100,000
)
 

Payments of deferred financing costs
(4,534
)
 

Net-settle adjustment on restricted stock
(2,524
)
 
(1,288
)
Dividends paid on common stock
(37,685
)
 
(29,628
)
Net cash provided by financing activities
201,298

 
1,631

Net (decrease) increase in cash and cash equivalents
(34,163
)
 
4,651

Cash and cash equivalents, beginning of period
36,792

 
6,909

Cash and cash equivalents, end of period
$
2,629

 
$
11,560







CARETRUST REIT, INC.
DEBT SUMMARY
(dollars in thousands)
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2019
 
Interest
 
Maturity
 
 
 
% of
 
Deferred
 
Net Carrying
Debt
Rate
 
Date
 
Principal
 
Principal
 
Loan Costs
 
Value
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Rate Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior unsecured notes payable
5.250
%
 
2025
 
$
300,000

 
55.0
%
 
$
(4,468
)
 
$
295,532

 
 
 
 
 
 
 
 
 
 
 
 
Floating Rate Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior unsecured term loan
3.911
%
[1]
2026
 
200,000

 
36.7
%
 
(1,392
)
 
198,608

 
 
 
 
 
 
 
 
 
 
 
 
Unsecured revolving credit facility
3.502
%
[2]
2024
[3]
45,000

 
8.3
%
 

[4]
45,000

 
3.836
%
 
 
 
245,000

 
45.0
%
 
(1,392
)
 
243,608

 
 
 
 
 
 
 
 
 
 
 
 
Total Debt
4.614
%
 
 
 
$
545,000

 
100.0
%
 
$
(5,860
)
 
$
539,140

 
 
 
 
 
 
 
 
 
 
 
 
[1] Funds can be borrowed at applicable LIBOR plus 1.50% to 2.20% or at the Base Rate (as defined) plus 0.50% to 1.20%.
[2] Funds can be borrowed at applicable LIBOR plus 1.10% to 1.55% or the Base Rate (as defined) plus 0.10% to 0.55%.
[3] Maturity date assumes exercise of two 6-month extension options.
[4] Deferred financing fees are not shown net for the unsecured revolving credit facility and are included in assets on the balance sheet.







CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES
 (shares in thousands)
 (Unaudited)
 
 
 
 
 
 
 
 
 
 
 2019 Guidance
 
 
 
 
 
 
 
 
 
 
 
 
Low
 
High
Net income
$
0.69

 
$
0.71

 
Real estate related depreciation and amortization
0.56

 
0.56

 
Impairment of real estate investment
0.08

 
0.08

Funds from Operations (FFO)
1.33

 
1.35

 
Write-off accounts and straight-line rent receivable
0.02

 
0.02

Normalized FFO
$
1.35

 
$
1.37

 
 
 
 
 
Net income
$
0.69

 
$
0.71

 
Real estate related depreciation and amortization
0.56

 
0.56

 
Amortization of deferred financing fees
0.02

 
0.02

 
Amortization of stock-based compensation
0.05

 
0.05

 
Straight-line rental income
(0.02
)
 
(0.02
)
 
Impairment of real estate investment
0.08

 
0.08

Funds Available for Distribution (FAD)
1.38

 
1.40

 
Write-off accounts and straight-line rent receivable
0.02

 
0.02

Normalized FAD
$
1.40

 
$
1.42

Weighted average shares outstanding:
 
 
 
 
Diluted
93,431

 
93,431










Non-GAAP Financial Measures
EBITDA represents net income before interest expense (including amortization of deferred financing costs), amortization of stock-based compensation, and depreciation and amortization. Normalized EBITDA represents EBITDA as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of core operating performance, such as real estate impairment charges, certain deferred preferred return, losses on the extinguishment of debt, reserve for advances and deferred rent and gains or losses from dispositions of real estate or other real estate investments. EBITDA and Normalized EBITDA do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. EBITDA and Normalized EBITDA do not purport to be indicative of cash available to fund future cash requirements, including the Company’s ability to fund capital expenditures or make payments on its indebtedness. Further, the Company’s computation of EBITDA and Normalized EBITDA may not be comparable to EBITDA and Normalized EBITDA reported by other REITs.
Funds from Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), and Funds Available for Distribution (“FAD”) are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP.
FFO is defined by NAREIT as net income computed in accordance with GAAP, excluding gains or losses from dispositions of real estate or other real estate investments, real estate depreciation and amortization and real estate impairment charges, and adjustments for unconsolidated partnerships and joint ventures. The Company computes FFO in accordance with NAREIT’s definition.
FAD is defined as FFO excluding noncash income and expenses, such as amortization of stock-based compensation, amortization of deferred financing fees and the effects of straight-line rent. The Company considers FAD to be a useful supplemental measure to evaluate the Company’s operating results excluding these income and expense items to help investors, analysts and other interested parties compare the operating performance of the Company between periods or as compared to other companies on a more consistent basis.
In addition, the Company reports Normalized FFO and Normalized FAD, which adjust FFO and FAD for certain revenue and expense items that the Company does not believe are indicative of its ongoing operating results, such as losses on the extinguishment of debt, certain deferred preferred returns, the effect of the senior unsecured notes payable redemption and other unanticipated charges. By excluding these items, investors, analysts and our management can compare Normalized FFO and Normalized FAD between periods more consistently.
While FFO, Normalized FFO, FAD and Normalized FAD are relevant and widely-used measures of operating performance among REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO, Normalized FFO, FAD and Normalized FAD do not purport to be indicative of cash available to fund future cash requirements.
Further, the Company’s computation of FFO, Normalized FFO, FAD and Normalized FAD may not be comparable to FFO, Normalized FFO, FAD and Normalized FAD reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define FAD differently than the Company does.
The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure. The Company also believes that the use of EBITDA, Normalized EBITDA, FFO, Normalized FFO, FAD and Normalized FAD, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful. The Company considers EBITDA and Normalized EBITDA useful in understanding the Company’s operating results independent of its capital structure, indebtedness and other charges that are not indicative of its ongoing results, thereby allowing for a more meaningful comparison of operating performance between periods and against other REITs. The Company considers FFO, Normalized FFO, FAD and Normalized FAD to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses from real estate dispositions, impairment charges and real estate depreciation and amortization, and, for FAD and Normalized FAD, by excluding noncash income and expenses such as amortization of stock-based compensation, amortization of deferred financing fees, and the effects of straight-line rent, FFO, Normalized FFO, FAD and Normalized FAD can help investors compare the Company’s operating performance between periods and to other REITs.


http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13045204&doc=33




exhibit992ctreq22019fina
EXHIBITEXHIBITEXHIBIT 99.2 99.2 99.2 Avantara Crown Point (Parker, CO) Downey Care Center (Downey, CA)


 
Disclaimers This supplement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding our intent, belief or expectations, including, but not limited to, statements regarding future financial and financing positions, business and acquisition strategies, growth prospects, operating and financial performance, expectations regarding the making of distributions, payment of dividends, compliance with and changes in governmental regulations, and the performance of our operators and their respective facilities. Words such as “anticipate,” “believe,” “could,” "expect,” “estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,” “would,” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. Our forward-looking statements are based on our current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (ii) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (iii) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (iv) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms; (v) the ability to generate sufficient cash flows to service our outstanding indebtedness; (vi) access to debt and equity capital markets; (vii) fluctuating interest rates; (viii) the ability to retain our key management personnel; (ix) the ability to maintain our status as a real estate investment trust (“REIT”); (x) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xi) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xii) any additional factors included in our Annual Report on Form 10-K for the year ended December 31, 2018, including in the section entitled “Risk Factors” in Item 1A of Part I of such report, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission (the “SEC”). This supplement contains certain non-GAAP financial information relating to CareTrust REIT including EBITDA, Normalized EBITDA, FFO, Normalized FFO, FAD, Normalized FAD, and certain related ratios. Explanatory footnotes and a glossary explaining this non-GAAP information are included in this supplement. Reconciliations of these non-GAAP measures are also included in this supplement. Other financial information, including GAAP financial information, is also available on our website. Non-GAAP financial information does not represent financial performance under GAAP and should not be considered in isolation, as a measure of liquidity, as an alternative to net income, or as an indicator of any other performance measure determined in accordance with GAAP. You should not rely on non-GAAP financial information as a substitute for GAAP financial information, and should recognize that non-GAAP information presented herein may not compare to similarly-termed non-GAAP information of other companies (i.e., because they do not use the same definitions for determining any such non-GAAP information). This supplement also includes certain information regarding operators of our properties (such as EBITDARM Coverage, EBITDAR Coverage, and Occupancy), most of which are not subject to audit or SEC reporting requirements. The operator information provided in this supplement has been provided by the operators. We have not independently verified this information, but have no reason to believe that such information is inaccurate in any material respect. We are providing this information for informational purposes only. The Ensign Group, Inc. ("Ensign") is subject to the registration and reporting requirements of the SEC and is required to file with the SEC annual reports containing audited financial information and quarterly reports containing unaudited financial information. Ensign’s financial statements, as filed with the SEC, can be found at the SEC's website at www.sec.gov. Information in this supplement is provided as of June 30, 2019, unless specifically stated otherwise. We expressly disclaim any obligation to update or revise any information in this supplement (including2 forward-looking statements), whether to reflect any change in our expectations, any change in events, conditions or circumstances, or otherwise. As used in this supplement, unless the context requires otherwise, references to “CTRE,” “CareTrust,” “CareTrust REIT” or the “Company” refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America. 2


 
Company Profile Company Profile 3 CareTrust REIT is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development CareTrust at a Glance 4 and leasing of seniors housing and healthcare-related properties. CareTrust REIT generates revenues primarily by leasing properties Investments 5 to a diverse group of local, regional and national seniors housing operators, healthcare services providers, and other healthcare- Portfolio Overview related businesses. Portfolio Performance 6 Tenant Summary 7 Since its debut as a standalone public company on June 1, 2014, and as of August 6, 2019, CareTrust REIT has expanded its tenant Rent Diversification by Tenant 8 roster to 22 operators, and has grown its real estate portfolio to 213 net-leased healthcare properties and three operated seniors Geographic Diversification 9 housing properties across 28 states, consisting of 21,686 operating beds/units. As of August 6, 2019, we also had other real estate investments consisting of one preferred equity investment and two mortgage loans receivable. Rent Diversification by State 10 Lease Maturities 11 Management Financial Overview Consolidated Income Statements 13 Greg Stapley Bill Wagner Reconciliation of EBITDA, FFO and FAD 14 Chairman and Chief Executive Officer Chief Financial Officer Consolidated Balance Sheets 16 Key Debt Metrics 17 Dave Sedgwick Mark Lamb Chief Investment Officer Debt Summary 18 Chief Operating Officer 2019 Guidance 19 Equity Capital Transactions 20 Board of Directors Other Financial Highlights 21 Glossary 22 Greg Stapley Diana Laing Jon Kline Allen Barbieri Spencer Plumb Chairman Contact Information CareTrust REIT, Inc. 905 Calle Amanecer, Suite 300 Analyst Coverage San Clemente, CA 92673 (949) 542-3130 | ir@caretrustreit.com www.caretrustreit.com KeyBanc Capital Markets Raymond James Wells Fargo Securities Jordan Sadler | (917) 318-2280 Jonathan Hughes | (727) 567-2438 Todd Stender | (562) 637-1371 Transfer Agent Broadridge Corporate Issuer Solutions RBC Capital Markets Stifel, Nicolaus & Company BMO Capital Markets P.O. Box 1342 Michael Carroll | (440) 715-2649 Chad Vanacore | (518) 587-2581 John Kim | (212) 885-4115 Brentwood, NY 11717 (800) 733-1121 | shareholder@broadridge.com CapitalOne Securities JMP Research Dan Bernstein | (571) 835-7202 Peter Martin | (415) 835-8904 3


 
CareTrust REIT, Inc. Nasdaq: CTRE Market Data (as of June 30, 2019) Closing Price: $23.78 52 Week Range: $25.54– $16.29 Market Cap: $2,273M Enterprise Value: $2,815M Outstanding Shares: 95.6M 213 28 States Credit Ratings Properties Credit Ratings S&P S&PCorporate Rating: B+ (positive) CorporateSenior Unsecured Rating: BB-Notes: (positive) BB- Senior Unsecured Notes: BB Moody’s 22 Operators Moody’sCorporate Rating: B1 (positive) CorporateSenior Unsecured Rating: Ba2Notes: (stable) B1 21,686 $1,740.3 M Senior Unsecured Notes: Ba2 Operating Investments Beds/Units Note: 44 Amounts are as of June 30, 2019 and exclude our three operated seniors housing properties, one preferred equity investment and two mortgage loans receivable.


 
Investments (dollars in thousands) Property Initial Initial Operating Cost per Initial Yield Date Operator Type Location Facilities Investment[1] Bed/Unit [2] Bed/Unit [3] Initial Rent [4] [5] ALF, SNF, 6/1/2014 The Ensign Group Campus Various 94 $ 501,673 10,053 $ 50 $ 56,000 N/A 2014 Investments 6 33,609 157 166 3,076 9.2 % 2015 Investments 20 233,028 1,840 127 22,263 9.6 % 2016 Investments 35 288,023 2,800 101 26,084 9.1 % 2017 Investments 36 309,805 3,324 92 28,000 9.0 % 2018 Investments 12 111,950 1,103 101 9,955 8.9 % 01/31/2019 WLC Management Campus IL 1 8,940 128 70 854 9.6 % 02/11/2019 Covenant Care SNF CA 4 43,938 492 89 3,983 9.1 % 02/11/2019 Covenant Care[7] SNF IL 5 11,389 440 26 1,025 9.0 % 04/01/2019 PMG and Southwest LTC ("Project Gulf Coast") SNF, Campus LA/TX 12 214,958 1,734 124 19,030 8.9 % 05/01/2019 Next Gen P, LLC SNF TX 1 10,035 118 85 900 9.0 % 06/18/2019 Cascadia Healthcare SNF ID 1 16,198 99 164 1,450 9.0 % 2019 Investments 24 305,458 3,011 114 27,242 8.9 % Total Post Spin-off Investments[6] 133 1,281,873 12,235 107 116,620 9.1 % Total Investments[6] 227 $ 1,783,546 22,288 $ 81 $ 172,620 Notes: [1] Initial Investment for pre-spin properties represents Ensign's gross book value. Initial Investment for post-spin properties represents CareTrust REIT’s purchase price and transaction costs. [2] Initial Operating Beds/Units as of the acquisition date. [3] Total Cost per Bed/Unit excludes preferred equity investments and two mortgage loans receivable. [4] Initial Rent represents the annualized acquisition-date cash rent or deferred interest income on preferred equity investments and excludes ground lease income. [5] Initial Yield represents Initial Rent divided by Initial Investment. [6] All amounts exclude our three operated seniors housing properties and, except as otherwise indicated, include the preferred equity investments and two mortgage loans receivable. [7] Term loan secured by first mortgages on five skilled nursing facilities owned and operated by Covenant Care subsidiaries. 5


 
Portfolio Performance (dollars in thousands) As of June 30, 2019 Operating % of Total % of Total Asset Type Facilities Beds/Units Investment [1] Investment Rent [2] Rent Current Yield [3] Skilled Nursing 156 15,754 $1,268,911 72.9% $129,114 74.4% 10.2% Multi-Service Campus 21 3,115 249,472 14.3% 24,692 14.2% 9.9% Seniors Housing 36 2,817 221,933 12.8% 19,763 11.4% 8.9% Total Net-Leased Assets [4] 213 21,686 $1,740,316 100.0% $173,569 100.0% 10.0% Total Portfolio Total Portfolio less The Ensign Group & Transitioned Facilities[6] For the twelve-month period ended March 31, 2019 [5] For the twelve-month period ended March 31, 2019 [5] EBITDAR EBITDARM EBITDAR EBITDARM Asset Type Coverage Coverage Occupancy Coverage Coverage Occupancy Skilled Nursing 1.81x 2.37x 77.7% 1.43x 1.91x 78.4% Multi-Service Campus 1.72x 2.16x 78.0% 1.49x 1.86x 76.5% Seniors Housing 1.22x 1.44x 83.6% 0.98x 1.15x 86.1% Total 1.72x 2.21x 78.6% 1.35x 1.76x 79.5% Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. Investment for post-spin properties represents CareTrust REIT’s cumulative capital investment. Capital investment includes purchase price, transaction costs and landlord-funded capital expenditures, if any. [2] Rent represents June 2019 rent, annualized, or based on the initial cash rents annualized and excludes ground lease income. [3] Current Yield represents Rent divided by Investment. [4] All amounts exclude our three operated seniors housing properties, one preferred equity investment and two mortgage loans receivable. [5] EBITDAR Coverage, EBITDARM Coverage and Occupancy include information provided by our tenants. We have not independently verified this information, but have no reason to believe that such information is inaccurate in any material respect. [6] Transitioned facilities include 16 Pristine Senior Living facilities transitioned in December 2017 & May 2018, 4 Better Senior Living facilities transitioned in December 2017 and 2 OnPointe Health facilities transitioned in May 2018. See “Glossary” for additional information. 6


 
Tenant Summary 7


 
Rent Diversification by Tenant (dollars in thousands) As of June 30, 2019 Operating % of Total % of Total Facilities Beds/Units Investment[1] Investment Rent[2] Rent 1 The Ensign Group 93 9,923 510,121 29.3% 60,998 35.1% 2 Priority Management Group 15 2,145 296,809 17.1% 26,968 15.5% 3 Trillium Healthcare Group 18 1,362 128,778 7.4% 11,879 6.8% 4 Cascadia Healthcare 12 1,013 102,367 5.9% 9,626 5.5% 5 Trio Healthcare 7 672 89,442 5.1% 8,890 5.1% Total Top 5 Tenants 145 15,115 1,127,517 64.8% 118,361 68.0% 6 Providence Group 4 654 83,743 4.8% 7,760 4.5% 7 Covenant Care 6 791 69,478 4.0% 6,523 3.8% 8 Eduro Healthcare, LLC 6 752 70,760 4.1% 6,456 3.7% 9 Premier Senior Living Group 8 385 68,564 3.9% 6,290 3.6% 10 WLC Management 8 772 46,363 2.7% 4,725 2.8% Total Top 10 Tenants 177 18,469 1,466,425 84.3% 150,115 86.4% All Other Tenants 36 3,217 273,891 15.7% 23,454 13.6% Total [3] 213 21,686 $ 1,740,316 100.0% $ 173,569 100.0% Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. Investment for post-spin properties represents CareTrust REIT’s cumulative capital investment. Capital investment includes purchase price, transaction costs and landlord-funded capital expenditures, if any. [2] Rent represents June 2019 rent, annualized, or based on the initial cash rents annualized and excludes ground lease income. [3] All amounts exclude our three operated seniors housing properties, one preferred equity investment and two mortgage loans receivable. 8


 
Top Five States OH: 9.9% LA: 9.0% ID: 7.1% CA: 18.9% TX: 18.5% 1 ALF Run-Rate Rent Run-Rate Others: 36.6% 1 ALF OH: 11.2% LA: 10.1% CA: 16.6% ID: 6.8% 1 SNF TX: 18.0% Investment Others: 37.3% OH: 6.8% LA: 5.4% ID: 6.2% CA: 16.7% TX: 21.3% Beds/Units Others: 43.6% 9


 
Rent Diversification by State (dollars in thousands) As of June 30, 2019 Net-Leased Assets by State Operating % of Total % of Total Facilities Beds/Units Investment[1] Investment Rent[2] Rent 1 California 30 3,624 $ 289,759 16.6% $ 32,808 18.9% 2 Texas 37 4,628 313,406 18.0% 32,043 18.5% 3 Ohio 16 1,484 194,462 11.2% 17,227 9.9% 4 Louisiana 8 1,164 175,211 10.1% 15,600 9.0% 5 Idaho 16 1,349 117,801 6.8% 12,237 7.1% Top 5 States 107 12,249 1,090,639 62.7% 109,915 63.4% 6 Arizona 10 1,327 60,753 3.5% 9,397 5.4% 7 Michigan 10 669 76,624 4.4% 7,116 4.1% 8 Washington 12 1,032 61,730 3.5% 6,512 3.8% 9 Utah 12 1,248 77,322 4.4% 6,307 3.6% 10 Colorado 7 770 60,435 3.5% 5,990 3.5% Top 10 States 158 17,295 1,427,503 82.0% 145,237 83.8% All Other States 55 4,391 312,813 18.0% 28,332 16.2% Total[3] 213 21,686 $ 1,740,316 100.0% $ 173,569 100.0% Notes: [1] Investment for pre-spin properties represents Ensign's gross book value. For post-spin properties, Investment represents CareTrust REIT’s cumulative capital investment. Capital investment includes purchase price, transaction costs and landlord-funded capital expenditures, if any. [2] Rent represents June 2019 rent, annualized, or based on the initial cash rents annualized and excludes ground lease income. [3] All amounts exclude our three operated seniors housing properties, one preferred equity investment and two mortgage loans receivable. 10


 
Lease Maturities (dollars in thousands) As of June 30, 2019 Lease Maturity % of Total % of Total Year[1] Investment[2] Investment Rent[3] Rent 2026 58,157 3.3% 6,733 3.9% 2027 55,929 3.2% 5,974 3.4% 2028 79,914 4.6% 8,123 4.7% 2029 152,333 8.8% 13,624 7.8% 2030 283,398 16.3% 25,652 14.8% 2031 535,164 30.8% 50,553 29.1% 2032 216,923 12.5% 22,715 13.1% 2033 235,305 13.5% 28,046 16.2% 2034 123,193 7.0% 12,149 7.0% Total[4] $ 1,740,316 100.0% $ 173,569 100.0% Providence Orangetree (Riverside, CA) Notes: [1] Lease Maturity Year represents the scheduled expiration year of the primary term of the lease and does not include tenant extension options, if any. [2] Investment for pre-spin properties represents Ensign's gross book value. For post-spin properties, Investment represents CareTrust REIT’s cumulative capital investment. Capital investment includes purchase price, transaction costs and landlord-funded capital expenditures, if any. [3] Rent represents June 2019 rent, annualized and excludes ground lease income. [4] All amounts exclude our three operated seniors housing properties, one preferred equity investment and two mortgage loans receivable. 29.1% 14.8% 16.2% 13.1% of Rent 7.8% 7.0% % 3.9% 3.4% 4.7% 2026 2027 2028 2029 2030 2031 2032 2033 2034 Lease Maturity Year 11


 
12


 
Consolidated Income Statements (amounts in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenues: Rental income $ 44,123 $ 34,708 $ 82,470 $ 68,524 Tenant reimbursements[1] — 3,016 — 5,984 Independent living facilities 887 845 1,747 1,644 Interest and other income 1,191 400 1,642 918 Total revenues 46,201 38,969 85,859 77,070 Expenses: Depreciation and amortization 13,437 11,299 25,339 22,876 Interest expense 7,285 7,285 14,145 14,377 Property taxes 456 3,016 1,282 5,984 Independent living facilities 719 744 1,426 1,460 General and administrative 4,606 3,358 7,916 6,550 Total expenses 26,503 25,702 50,108 51,247 Other income: Gain on sale of real estate — — — 2,051 Net income $ 19,698 $ 13,267 $ 35,751 $ 27,874 Earnings per common share: Basic $ 0.21 $ 0.17 $ 0.39 $ 0.36 Diluted $ 0.21 $ 0.17 $ 0.39 $ 0.36 Weighted-average number of common shares: Basic 94,036 76,374 91,039 75,941 Diluted 94,036 76,374 91,039 75,941 Dividends declared per common share $ 0.225 $ 0.205 $ 0.45 $ 0.41 Notes: [1] Prior to the adoption of the ASU 842, we recognized tenant recoveries as tenant reimbursement revenues regardless of whether the third party was paid by the lessor or lessee. In the three and six months ended June 30, 2019, we recognized real estate taxes of $0.5 million and $1.3 million, respectively, which were paid by us directly to third parties and classified as rental income on our condensed consolidated income statement. 13


 
Reconciliation of EBITDA, FFO and FAD Quarter Quarter Ended Quarter Quarter Quarter Ended September 30, Ended Ended Ended (amounts in thousands, except per share data) June 30, 2018 2018 December 31, 2018 March 31, 2019 June 30, 2019 Net income $ 13,267 $ 14,510 $ 15,539 $ 16,053 $ 19,698 Depreciation and amortization 11,299 11,351 11,539 11,902 13,437 Interest expense 7,285 6,805 6,678 6,860 7,285 Amortization of stock-based compensation 924 988 1,032 994 1,147 EBITDA 32,775 33,654 34,788 35,809 41,567 Normalized EBITDA $ 32,775 $ 33,654 $ 34,788 $ 35,809 $ 41,567 Net income $ 13,267 $ 14,510 $ 15,539 $ 16,053 $ 19,698 Real estate related depreciation and amortization 11,265 11,330 11,520 11,884 13,421 Funds from Operations (FFO) 24,532 25,840 27,059 27,937 33,119 Normalized FFO $ 24,532 $ 25,840 $ 27,059 $ 27,937 $ 33,119 See Glossary for additional information. 14


 
Reconciliation of EBITDA, FFO and FAD (continued) Quarter Quarter Quarter Quarter Quarter Ended Ended Ended Ended Ended (amounts in thousands, except per share data) June 30, 2018 September 30, 2018 December 31, 2018 March 31, 2019 June 30, 2019 Net income $ 13,267 $ 14,510 $ 15,539 $ 16,053 $ 19,698 Real estate related depreciation and amortization 11,265 11,330 11,520 11,884 13,421 Amortization of deferred financing fees 484 484 486 541 487 Amortization of stock-based compensation 924 988 1,032 994 1,147 Straight-line rental income (342) (698) (702) (463) (474) Funds Available for Distribution (FAD) 25,598 26,614 27,875 29,009 34,279 Normalized FAD $ 25,598 $ 26,614 $ 27,875 $ 29,009 $ 34,279 FFO per share $ 0.32 $ 0.32 $ 0.32 $ 0.32 $ 0.35 Normalized FFO per share $ 0.32 $ 0.32 $ 0.32 $ 0.32 $ 0.35 FAD per share $ 0.33 $ 0.33 $ 0.33 $ 0.33 $ 0.36 Normalized FAD per share $ 0.33 $ 0.33 $ 0.33 $ 0.33 $ 0.36 Diluted weighted average shares outstanding [1] 76,545 81,687 84,324 88,266 94,292 [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. See Glossary for additional information. 15


 
Consolidated Balance Sheets (dollars in thousands) June 30, 2019 December 31, 2018 Assets: Real estate investments, net $ 1,482,040 $ 1,216,237 Other real estate investments, net 26,725 18,045 Cash and cash equivalents 2,629 36,792 Accounts and other receivables, net 9,705 11,387 Prepaid expenses and other assets 6,947 8,668 Deferred financing costs, net 3,513 633 Total assets $ 1,531,559 $ 1,291,762 Liabilities and Equity: Senior unsecured notes payable, net $ 295,532 $ 295,153 Senior unsecured term loan, net 198,608 99,612 Unsecured revolving credit facility 45,000 95,000 Accounts payable and accrued liabilities 12,665 15,967 Dividends payable 21,617 17,783 Total liabilities 573,422 523,515 Equity: Common stock 951 859 Additional paid-in capital 1,161,144 965,578 Cumulative distributions in excess of earnings (203,958) (198,190) Total equity 958,137 768,247 Total liabilities and equity $ 1,531,559 $ 1,291,762 16


 
Key Debt Metrics Net Debt to Normalized EBITDA [1][2] Net Debt to Enterprise Value [3] 36.5% 4.6 4.6 4.5 4.4 30.8% 30.5% 4.1 28.8% 3.7 24.1% 24.7% 24.2% 3.6 22.3% 3.5 20.2% 3.3 3.3 3.3 18.1% 19.1% 6 7 7 7 7 8 8 8 8 9 9 6 7 7 7 7 8 8 8 8 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 1 1 0 0 1 1 0 0 1 1 0 1 1 0 0 1 1 0 0 1 1 0 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 2 3 6 9 2 3 6 9 2 3 6 2 3 6 9 2 3 6 9 2 3 6 1 1 1 1 1 1 [1] Net Debt to Normalized EBITDA compares total debt as of the last day of the quarter to the annualized Normalized EBITDA for the quarter. [2] See "Financials & Filings - Quarterly Results" on the Investors section of our website at http://investor.caretrustreit.com for reconciliations of Normalized EBITDA to the most directly comparable GAAP measure for the periods presented. [3] Net Debt to Enterprise Value compares total debt as of the last day of the quarter to CareTrust REIT’s Enterprise Value as of the last day of the quarter. See “Glossary” for additional information. 17


 
Debt Summary (dollars in thousands) June 30, 2019 Interest Maturity % of Deferred Net Carrying Debt Rate Date Principal Principal Loan Costs Value Fixed Rate Debt Senior unsecured notes payable 5.250% 2025 $ 300,000 55.0% $ (4,468) $ 295,532 Floating Rate Debt Senior unsecured term loan 3.911% [1] 2026 200,000 36.7% (1,392) 198,608 Unsecured revolving credit facility 3.502% [2] 2024 [3] 45,000 8.3% — [4] 45,000 3.836% 245,000 45.0% (1,392) 243,608 Total Debt 4.614% $ 545,000 100.0% $ (5,860) $ 539,140 Debt Maturity Schedule $300,000 $200,000 $45,000 Principal 2019 2020 2021 2022 2023 2024 2025 2026 Debt Maturity Year Notes: [1] Funds can be borrowed at applicable LIBOR plus 1.50% to 2.20% or at the Base Rate (as defined) plus 0.50% to 1.20%. [2] Funds can be borrowed at applicable LIBOR plus 1.10% to 1.55% or the Base Rate (as defined) plus 0.10% to 0.55%. [3] Maturity date assumes exercise of two, 6-month extension options. [4] Deferred financing fees are not shown net for the unsecured revolving credit facility and are included in assets on the balance sheet. 18


 
2019 Guidance (shares in thousands) Low High Net income $ 0.69 $ 0.71 Real estate related depreciation and amortization 0.56 0.56 Impairment of real estate investment 0.08 0.08 Funds from Operations (FFO) 1.33 1.35 Write-off accounts and straight-line rent receivable 0.02 0.02 Normalized FFO $ 1.35 $ 1.37 Net income $ 0.69 $ 0.71 Real estate related depreciation and amortization 0.56 0.56 Amortization of deferred financing fees 0.02 0.02 Amortization of stock-based compensation 0.05 0.05 Straight-line rental income (0.02) (0.02) Impairment of real estate investment 0.08 0.08 Funds Available for Distribution (FAD) 1.38 1.40 Write-off accounts and straight-line rent receivable 0.02 0.02 Normalized FAD $ 1.40 $ 1.42 Weighted average shares outstanding: Diluted 93,431 93,431 See “Glossary” for additional information. 19


 
Equity Capital Transactions Follow-On Equity Offering Activity 2015 2016 2019 Q1 Q2 Q3 Q4 Total Q1 Q2[2] Number of Shares (000s) 16,330 — 9,775 — 6,325 16,100 — 6,641 Public Offering Price per Share $ 10.50 $ — $ 11.35 $ — $ 13.35 $ 12.14 [1] $ — $ 23.35 Gross Proceeds (000s) $ 171,465 $ — $ 110,946 $ — $ 84,439 $ 195,385 $ — $ 155,073 At-the-Market Offering Activity 2016 2017 2018 2019[3] Q1 Q2 Total Number of Shares (000s) 924 10,574 10,265 2,459 — 2,459 Average Price per Share $ 15.31 $ 16.43 $ 17.76 $ 19.48 $ — $ 19.48 Gross Proceeds (000s) $ 14,147 $ 173,760 $ 182,321 $ 47,893 $ — $ 47,893 Notes: [1] Represents average offering price per share for follow-on equity offerings. [2] On April 15, 2019, we completed an underwritten public offering pursuant to which we sold 6,641,250 shares of our common stock, par value $0.01 per share, at an initial price to the public of $23.35, including 866,250 shares of common stock sold pursuant to the full exercise of an option to purchase additional shares of common stock granted to the underwriters, resulting in approximately $149.0 million in net proceeds, after deducting the underwriting discount and offering expenses. [3] In connection with the entry into the equity distribution agreement and the commencement of the new $300.0 million ATM Program in March 2019 (the "New ATM Program") our “at-the-market” equity offering program pursuant to our prior equity distribution agreement, dated as of May 17, 2017, was terminated. There was no New ATM Program activity for the three and six months ended June 30, 2019. As of June 30, 2019, CareTrust REIT had $300.0 million available for future issuances under the New ATM Program. 20


 
Other Financial Highlights Dividend History Normalized FFO Payout Ratio [1][2] $0.225 $0.225 66.1% 66.1% 70.3% 63.8% 59.7% 64.1% 64.1% 64.1% 64.1% 64.3% $0.205 $0.205 $0.205 $0.205 $0.185 $0.185 $0.185 $0.185 7 7 7 7 8 8 8 8 9 9 7 7 7 7 8 8 8 8 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 /1 /1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 /2 /2 /2 /2 /2 3 3 /2 /2 /2 / / / / / / / / / / 1 0 0 1 1 / / 1 1 0 1 0 0 1 1 0 0 1 1 0 3 3 3 3 3 6 9 3 3 3 3 3 3 3 3 3 3 3 3 3 / / / / / / / / / / / / / / / / / / 3 6 9 2 3 2 3 6 3 6 9 2 3 6 9 2 3 6 1 1 1 1 Normalized FFO per Share [2] Normalized FFO [2] $33,119 $0.35 $27,937 $0.32 $0.32 $0.32 $0.32 $0.32 $27,059 $0.31 $25,840 $24,532 $23,639 $24,105 $0.29 $0.28 $0.28 $20,622 $21,028 $19,331 7 7 7 7 8 8 8 8 9 9 7 7 7 7 8 8 8 8 9 9 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 /2 1 0 0 1 1 0 0 1 1 0 1 0 0 1 1 0 0 1 1 0 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 /3 3 6 9 2 3 6 9 2 3 6 3 6 9 2 3 6 9 2 3 6 1 1 0 1 1 0 Notes: [1] Normalized FFO Payout Ratio represents dividends declared divided by Normalized FFO, in each case for the applicable quarter. [2] See “Financials & Filings - Quarterly Results” on the Investors section of our website at http://investor.caretrustreit.com for a reconciliation of Normalized FFO and Normalized FFO per Share to the most directly comparable GAAP measure for the periods presented. See “Glossary” for additional information. 21


 
Glossary Assisted Living Facilities (“ALFs”) EBITDARM Coverage Licensed healthcare facilities that provide personal care services, support and housing Aggregate EBITDARM produced by all facilities under a master lease (or other for those who need help with daily living activities, such as bathing, eating and grouping) divided by the base rent payable to CareTrust REIT under such master lease dressing, yet require limited medical care. The programs and services may include (or other grouping) for the same period. For this supplement, the reported period is transportation, social activities, exercise and fitness programs, beauty or barber shop the trailing twelve-month period ended March 31, 2019. Notwithstanding the access, hobby and craft activities, community excursions, meals in a dining room foregoing, for any facility for which CareTrust REIT has not received four consecutive setting and other activities sought by residents. These facilities are often in apartment- quarters of post-acquisition operating reports, the quarterly EBITDARM used in this like buildings with private residences ranging from single rooms to large apartments. calculation is the proforma EBITDARM utilized in CareTrust REIT’s underwriting Certain ALFs may offer higher levels of personal assistance for residents requiring process annualized. Beginning with the fifth quarter of reported post-acquisition memory care as a result of Alzheimer’s disease or other forms of dementia. Levels of operating performance, each reported quarter EBITDARM replaces the oldest personal assistance are based in part on local regulations.  underwriting proforma quarter EBITDARM, until all previously-used proforma quarters EBITDARM amounts are eliminated from the calculation. EBITDA Net income before interest expense, income tax, depreciation and amortization and Enterprise Value amortization of stock-based compensation.[1] Share price multiplied by the number of outstanding shares plus total outstanding debt, each as of a specified date. EBITDAR Net income before interest expense, income tax, depreciation, amortization and rent, Funds Available for Distribution (“FAD”) after applying a standardized management fee (5% of facility operating revenues). FFO, excluding straight-line rental income adjustments and amortization of deferred financing fees and stock-based compensation expense.[2] EBITDAR Coverage Aggregate EBITDAR produced by all facilities under a master lease (or other grouping) Funds from Operations (“FFO”) divided by the base rent payable to CareTrust REIT under such master lease (or other Net income, excluding gains and losses from dispositions of real estate or other real grouping) for the same period. For this supplement, the reported period is the trailing estate, before real estate depreciation and amortization and real estate impairment twelve-month period ended March 31, 2019. Notwithstanding the foregoing, for any charges. CareTrust REIT calculates and reports FFO in accordance with the definition facility for which CareTrust REIT has not received four consecutive quarters of post- and interpretive guidelines issued by the National Association of Real Estate acquisition operating reports, the quarterly EBITDAR used in this calculation is the Investment Trusts.[2] proforma EBITDAR utilized in CareTrust REIT’s underwriting process, annualized. Beginning with the fifth quarter of reported post-acquisition operating performance, Independent Living Facilities (“ILFs”) each reported quarter EBITDAR replaces the oldest underwriting proforma quarter Also known as retirement communities or senior apartments, ILFs are not healthcare EBITDAR, until all previously-used proforma quarters EBITDAR amounts are eliminated facilities. ILFs typically consist of entirely self-contained apartments, complete with from the calculation. their own kitchens, baths and individual living spaces, as well as parking for tenant vehicles. They are most often rented unfurnished, and generally can be personalized EBITDARM by the tenants, typically an individual or a couple over the age of 55. These facilities Earnings before interest expense, income tax, depreciation, amortization, cash rent, offer various services and amenities such as laundry, housekeeping, dining options/ and a standardized management fee (5% of facility operating revenues). meal plans, exercise and wellness programs, transportation, social, cultural and recreational activities, and on-site security. 22


 
Glossary Multi-Service Campus Notes: Facilities that include a combination of Skilled Nursing beds and Seniors Housing [1] EBITDA and Normalized EBITDA do not represent cash flows from operations or units. net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. EBITDA Normalized EBITDA and Normalized EBITDA do not purport to be indicative of cash available to fund future EBITDA, adjusted for certain income and expense items the Company does not believe cash requirements, including the Company’s ability to fund capital expenditures or are indicative of its ongoing results, such as certain acquisition costs, real estate make payments on its indebtedness. Further, the Company’s computation of EBITDA impairment charges, losses on the extinguishment of debt, certain deferred preferred and Normalized EBITDA may not be comparable to EBITDA and Normalized EBITDA returns, reserve for advances and deferred rent and gains or losses from dispositions reported by other REITs. of real estate or other real estate.[1] [2] CareTrust REIT believes FAD, FFO, Normalized FAD, and Normalized FFO (and their Normalized FAD related per-share amounts) are important non-GAAP supplemental measures of its FAD, adjusted for certain income and expense items the Company does not believe operating performance. Because the historical cost accounting convention used for are indicative of its ongoing results, such as certain reserves for advances and deferred real estate assets requires straight-line depreciation (except on land), such accounting rent, certain deferred preferred returns, and the effect of the senior unsecured notes presentation implies that the value of real estate assets diminishes predictably over payable redemption.[2] time, even though real estate values have historically risen or fallen with market and other conditions. Moreover, by excluding items not indicative of ongoing results, Normalized FFO Normalized FAD and Normalized FFO can facilitate meaningful comparisons of FFO, adjusted for certain income and expense items the Company does not believe operating performance between periods and between other companies. However, are indicative of its ongoing results, and certain reserves for advances and deferred FAD, FFO, Normalized FAD, and Normalized FFO (and their per-share amounts) do not rent, certain deferred preferred returns, and the effect of the senior unsecured notes represent cash flows from operations or net income attributable to shareholders as payable redemption.[2] defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. Occupancy A facility’s occupied operating beds/units divided by the total available operating beds/units for that facility, in each case for the trailing twelve-months ended March 31, 2019; provided that Occupancy for any facility acquired during such twelve-months period may be normalized. Seniors Housing Includes ALFs, ILFs, dedicated memory care facilities and similar facilities. Skilled Nursing or Skilled Nursing Facilities (“SNFs”) Licensed healthcare facilities that provide restorative, rehabilitative and nursing care for people not requiring the more extensive and sophisticated treatment available at an acute care hospital or long-term acute care hospital. Treatment programs include physical, occupational, speech, respiratory, ventilator, and wound therapy. 23


 
Cascadia of Nampa (Nampa, ID)